University of Pretoria

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Curtis Rose
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1 University of Pretoria

2 Dedication This thesis is dedicated to my wife, Lauren. Pagei

3 Acknowledgements ACKNOWLEDGEMENTS I would like to express my sincere appreciation to the following people: To my wife, Lauren, for your willingness to make sacrifices during the times that I could not be with you. Your love and support is a great encouragement; My parents, Gert and Annie Mostert, for your unconditional love and support. Thank you for always believing in me; My godparents, John and Rita Agenbag, and my grandfather, Pieter Siabbert, for your love, interest and support; Prof E J North and Prof P J Du Plessis, my promoters, for your time, patience and guidance. You ensured that this will be an unforgettable journey; Dr Mike van der Linde and Ms Nina Strydom for assisting me with the research results; To the Creator of all things, for affording me the opportunity and giving me the ability to complete this study. Pageii

4 SYNOPSIS The consumer decision-making process is well documented in marketing theory, where it provides a framework for marketers to understand how consumers evaluate and select among different alternatives to ultimately purchase a specific product or service. Specific influences on the process have also been documented to sensitise marketers to consider individual differences and environmental influences that could impact on the decision-making process. In South Africa, however, documented scientific research regarding consumer behaviour and decision-making when considering buying via the Internet is limited. Marketers who either sell their products or services via the Internet or provide Online product and service related information should be conversant with the various behavioural concepts and theories that form the basis for consumer behaviour and decision-making. The primary objective of this study was to determine the buying behaviour of South African Internet users by using the Internet as an information source and buying channel. Differences between Internet shoppers and non-shoppers, when viewing the factors they consider when deciding to purchase via the Net, were also established. The issue whether the period of Internet usage influenced the decision to buy via the Net was also addressed. Furthermore, the influence of the period of Internet usage on whether Internet users search Online for product and service information prior to purchasing from non-internet based sellers was explored. Finally, the study showed the influence of different demographic variables on the decision to purchase via the Internet and considered the influence of demographic variables on product and services categories respondents purchased from and consider purchasing from in the future. Page iii

5 The data for the research was gathered through a structured, self-administered questionnaire that was completed by respondents who logged onto a Website specially created for the purpose of the research project. Results from the research indicated that as the period of Internet usage increases, the percentage of Internet shoppers increases and the percentage of non-shoppers decreases. It was also found that Internet shoppers and nonshoppers consider different factors when deciding to purchase Online. Another main finding from the study was that the majority of Internet shoppers and nonshoppers search for (or consider searching for) product and service information on the Internet prior to purchasing from non-internet based sellers. One of the main conclusions is that not all product and service categories will be sold equally successful via the Internet. It could also be concluded that gender, household language, gross monthly household income, highest qualification and population group influence whether or not respondents have purchased via the Net before. The applicability of traditional consumer decision-making models was subjected and compared to the findings of this study and the conclusion is that the Internet environment indicates differences, which must be considered in predicting future consumer buying behaviour. Recommendations for future research include: the influence of brands on whether shoppers purchase Online; what the magnitude of the monetary value spent on products and services are in South Africa; and the development and testing of a consumer buying model for Internet shoppers ~ Page iv

6 CONTENTS Page SYNOPSIS iii LIST OF TABLES xiv LIST OF FIGURES xxvi CHAPTER 1: INTRODUCTION 1.1 INTRODUCTION DEFINING THE AREA OF RESEARCH A South African perspective of Internet access and usage Structure of South African Internet users by access method Definitions of terminology OBJECTIVES OF THE STUDY 18 Page v

7 1.4 CONTEXT OF THE STUDY IMPORTANCE OF THE STUDY DEMARCATION OF THE STUDY South African household Internet and World Wide Web users South African Internet user buying patterns OUTLINE OF THE STUDY 34 CHAPTER 2: CONSUMER BEHAVIOUR THEORY 2.1 INTRODUCTION AN OVERVIEW OF CONSUMER BEHAVIOUR Defining consumer behaviour The origin and importance of consumer behaviour MODELS OF HUMAN BEHAVIOUR The Marshallian economic model 42 Page vi

8 2.3.2 The Veblenian social-psychological model The Pavlovian learning model The Freudian psychoanalytic model Maslow's hierarchy of needs MODELS OF CONSUMER BEHAVIOUR Defining models of consumer behaviour Purpose and advantages of models of consumer behaviour Some models of consumer behaviour SUMMARY 94 CHAPTER 3: THE CONSUMER DECISION-MAKING PROCESS 3.1 INTRODUCTION TYPES OF DECISION-MAKING PROCESSES Consumer decision-making continuum Factors influencing the extent of decision-making 105 Page vii

9 3.3 NEED RECOGNITION Environmental influences Individual differences SEARCH Acquiring information Information processing PRE-PURCHASE ALTERNATIVE EVALUATION Evaluation criteria Determining the choice alternatives Assessing the choice alternatives Selecting a decision rule PURCHASE AND ITS OUTCOMES Consumption Post-purchase alternative evaluation Divestment SUMMARY 226 Page viii

10 CHAPTER 4: THE INFLUENCE OF THE INTERNET ON CONSUMER DECISION-MAKING 4.1 INTRODUCTION CONSUMER DECISION MAKING AND THE NATURE OF THE INTERNET THE CONSUMER DECISION-MAKING PROCESS IN THE INTERNET CONTEXT The Confidence Building phase The Skirmish phase War COMPARISON OF CONSUMER DECISION-MAKING MODELS SUMMARY 266 CHAPTER 5: PROBLEM STATEMENT, RESEARCH OBJECTIVES AND HYPOTHESES 5.1 INTRODUCTION 268 Page ix

11 5.2 PROBLEM STATEMENT RESEARCH HYPOTHESES Hypotheses formulated for the study Relation of objectives to hypotheses SUMMARY 277 CHAPTER 6: RESEARCH METHODOLOGY 6.1 INTRODUCTION INFORMATION SOURCES DATA COLLECTION METHODS Pre-testing Surveys SAMPLING Define the population Determine the sampling frame 290 Page x

12 6.4.3 Selecting the sampling method and size of the sample Selection of the sample units MEASUREMENT AND MEASUREMENT SCALES Measurement scale types QUESTIONNAIRE AND WEB-SITE DESIGN Questionnaire structure Web-site design INTERVIEW PROCEDURE CODING, EDITING AND TRANSFERRING OF DATA STATISTICAL PROCEDURES AND TECHNIQUES ADOPTED FOR THE STUDY Missing responses Descriptive statistics Statistical techniques applicable to the study SUMMARY 324 Page xi

13 CHAPTER 7: RESEARCH RESULTS AND IN"rERPRETATION 7.1 INTRODUCTION REALISATION RATE EMPIRICAL RESEARCH RESULTS Results from section A of the questionnaire Results from sections Band C of the questionnaire Results form section D of the questionnaire Logit analysis MAIN FINDINGS ACCEPTANCE OR REJECTION OF HYPOTHESES FORMULATED FOR THE STUDY SUMMARY 483 CHAPTER 8: CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH 8.1 INTRODUCTION 485 Page xii

14 8.2 MAJOR FINDINGS, CONCLUSIONS AND IMPLICATIONS BASED ON THE MAIN FINDINGS LINKING OF QUESTIONS AND MAIN FINDINGS TO THE RESEARCH OBJECTIVES LIMITATIONS Limitations based on the literature review Limitations of the empirical research phase of the study RECOMMENDATIONS FOR FUTURE RESEARCH SUMMARY 504 BIBLIOGRAPHY 505 LIST OF APPENDICES 517 Page xiii

15 LIST OF TABLES Page Table 1.1 Corporate Internet users 9 Table 1.2 Academic Internet users 11 Table 1.3 Dial-up Internet users 12 Table 1.4 South African Internet users by access method 13 Table 1.5 LSM categories and household income (2000) 23 Table 1.6 Number of households by LSM category 24 Table 1.7 South African household Internet and World Wide Web users and devices 26 Table 1.8 Web user time spent on different media 28 Table 2.1 Characteristics of the three stages of decision-making 70 Page xiv

16 Table 2.2 Comparison between the Engel, Blackwell, Miniard (1995 and 1986 versions) and the Engel, Kollat, Blackwell Model (1982 version) 92 Table 3.1 Some activities, interests and opinions that define lifestyle 167 Table 3.2 Sources and types of information 179 Table 3.3 Types of perceived risk and related uncertainty 183 Table 3.4 Hypothetical ratings for illustrating decision rules 208 Table 3.5 Dimensions and components of store image 218 Table 4.1 Tools that facilitate consumer search on the Internet 243 Table 4.2 Examples of shopping bots 247 Table 4.3 Cost variables and descriptions 253 Table 4.4 Product classifications 261 Table 4.5 Comparison between Web-based and ''traditional'' decision-making process 265 Page xv

17 Table 5.1 Relation of objectives to hypotheses 276 Table 6.1 Survey data collection methods 282 Table 6.2 Considerations when choosing a survey method 284 Table 6.3 Probability sampling methods 292 Table 6.4 Details of strata for the sample used 295 Table 6.5 Characteristics of different measurement scales 298 Table 6.6 Questions applicable to section A 301 Table 6.7 Questions applicable to non-internet shoppers (section B) 303 Table 6.8 Questions applicable to Internet shoppers (section C) 305 Table 6.9 Questions applicable to demographic information 306 Table 6.10 Research hypotheses and questionnaire matrix 307 Page xvi

18 Table 7.1 Realisation rate of respondents 327 Table 7.2 Demographic variables of respondents who participated in the study 328 Table 7.3 Places of Internet access 333 Table 7.4 Period of Internet usage 334 Table 7.5 Relationship between Internet shoppers, non-internet shoppers and period of Internet usage 336 Table 7.6 Non-Internet shoppers: consideration to purchase via the Internet in the future 340 Table 7.7 Relationship between non-internet shoppers considering to purchase via the Internet and period of I nternet usage 340 Table 7.8 Non-Internet shoppers: consideration to purchase via the Internet in the future if more South African businesses sell on the Net 342 Table 7.9 Relationship between period of Internet usage and non Internet shoppers considering to purchase via the Internet if more South African businesses sell on the Net 343 Page xvii

19 Table 7.10 Number of Internet service providers subscribed to in the past (04) 344 Table 7.11 Period subscribed to current ISP (05) 345 Table 7.12 Multiple subscriptions to Internet service providers (05a) 345 Table 7.13 Views regarding the Internet 346 Table 7.14 Usage of Internet banking services (07) 347 Table 7.15 Potential future Internet banking users (08) 348 Table 7.16 Period using Internet banking services (09) 348 Table 7.17 Frequency of use/consider to use Internet banking services (010) 348 Table 7.18 Relationship between Internet banking users and Internet shoppers 349 Table 7.19 Relationship between the decision to purchase via the Internet and period using Internet banking services 351 Table 7.20 Mean scores for statements considered when deciding whether or not to purchase Online 354 Page xviii

20 Table 7.21 Rotated factor matrix for non-internet shoppers 359 Table 7.22 Factors applicable to non-internet shoppers 363 Table 7.23 Rotated factor matrix for Internet shoppers 365 Table 7.24 Factors applicable to Internet shoppers 369 Table 7.25 Rotated factor matrix for Internet shoppers using the Net for less than two years 373 Table 7.26 Factors applicable to Internet shoppers using the Net for less than two years 377 Table 7.27 Rotated factor matrix for Internet shoppers using the Net for two years to less than three years 378 Table 7.28 Factors applicable to Internet shoppers using the Net for two years to less than three years 383 Table 7.29 Rotated factor matrix for Internet shoppers using the Net for three years to less than four years 385 Table 7.30 Factors applicable to Internet shoppers using the Net for three to less than four years 389 Page xix

21 Table 7.31 Rotated factor matrix for Internet shoppers using the Net for four years or more 391 Table 7.32 Factors applicable to Internet shoppers using the Net for four years or more 395 Table 7.33 Product and service categories non-internet shoppers seriously consider purchasing from via the Internet 398 Table 7.34 Product and service categories Internet shoppers have purchased from before and categories seriously being considered to purchase from in the future 401 Table 7.35 Product and service categories Internet shoppers have purchased from before 406 Table 7.36 Re-coding of product and service categories selected for further analyses 409 Table 7.37 Re-coding period of Internet usage for further analyses 410 Table 7.38 Relationship between period of Internet usage and categories purchased from 411 Table 7.39 Relationship between period of Internet usage and categories respondents consider purchasing from 412 Page xx

22 Table 7.40 Online information search prior to purchasing offline 413 Table 7.41 Relationship between period of Internet usage and product and service information searched for Online prior to offline purchases (non-internet shoppers) 414 Table 7.42 Relationship between period of Internet usage and product and service information searched for Online prior to offline purchases (Internet shoppers) 415 Table 7.43 Relationship between shopping Online and Online information search 417 Table 7.44 Relationship between considering to shop Online in the Future and Online information search 418 Table 7.45 Information on product and service categories searched for on the Internet prior to purchasing from non-internet based sellers 420 Table 7.46 Relationship between gender and whether or not respondents have purchased via the Internet 425 Table 7.47 Relationship between gender and categories purchased from via the Internet 426 Page xxi

23 Table 7.48 Relationship between gender and product and service categories respondents consider purchasing from 427 Table 7.49 Age groups of respondents 428 Table 7.50 Re-coding of age groups for further analyses 428 Table 7.51 Relationship between age groups and whether or not respondents have purchased via the Internet 429 Table 7.52 Respondents' household language 430 Table 7.53 Relationship between household language and whether or not respondents have purchased via the Internet 431 Table 7.54 Relationship between household language and product and service categories purchased from 432 Table 7.55 Relationship between household language and product and service categories respondents consider purchasing from 433 Table 7.56 Respondents' gross monthly household income 434 Table 7.57 Re-coding of gross monthly household income groups for further analyses 435 Page xxii

24 Table 7.58 Relationship between gross monthly income and whether or not respondents have purchased Online 435 Table 7.59 Relationship between gross monthly household income and product and service categories purchased from via the Internet 436 Table 7.60 Relationship between gross monthly household income and product and service categories respondents consider purchasing from 437 Table 7.61 Respondents' highest qualifications 438 Table 7.62 Re-coding of highest qualification groups for further analyses 438 Table 7.63 Relationship between qualifications and whether or not respondents have purchased via the Internet 439 Table 7.64 Relationship between qualifications and product and service categories purchased from 440 Table 7.65 Relationship between qualifications and product and service categories respondents consider purchasing from 441 Table 7.66 Respondents' geographic location 441 Page xxiii

25 Table 7.67 Relationship between geographic location and whether or not respondents have purchased on the Internet 443 Table 7.68 Respondents' population groups 444 Table 7.69 Relationship between population group and whether or not respondents have purchased via the Internet 445 Table 7.70 Relationship between population group and product and service categories purchased from 446 Table 7.71 Relationship between population group and product and service categories respondents consider purchasing from 446 Table 7.72 Respondents' marital status 447 Table 7.73 Re-coding of marital status groups for further analyses 448 Table 7.74 Relationship between marital status and whether or not respondents have purchased via the Internet 448 Table 7.75 Number of active Internet users per household 449 Table 7.76 Number of people per household 450 Page xxiv

26 Table 7.77 Results from the logit analysis 452 Table 8.1 Factors identified for Internet shoppers and non-shoppers 495 Table 8.2 A suggested framework for an Internet-based consumer Decision-making process 496 Table 8.3 Linking of secondary research objectives, research questions and main findings 499 Page xxv

27 LIST OF FIGURES Page Figure 1.1 South African Internet users by access method 14 Figure 1.2 Percentage of households with Internet access (1999) 25 Figure 1.3 Frequency of Internet access at home 27 Figure 1.4 Hours spent per week on the Internet at home 28 Figure 1.5 Top 10 items being bought Online 30 Figure 1.6 Ranking of items that Online shoppers would never buy Online 32 Figure 1.7 Planning to shop Online in future 33 Figure 2.1 Maslow's hierarchy of needs 53 Figure 2.2 Bettman's information processing model 62 Page xxvi

28 Figure 2.3 The Nicosia model of consumer decision-making 66 Figure 2.4 The Howard-Sheth model of buyer behaviour 69 Figure 2.5 Howard's general theory of consumer behaviour 74 Figure 2.6 The Engel, Blackwell & Miniard Model version 80 Figure 3.1 Consumer decision-making process continuum 98 Figure 3.2 The consumer decision-making process 107 Figure 3.3 The need recognition process 109 Figure 3.4 Need recognition 111 Figure 3.5 The motivation process 148 Figure 3.6 The relationship among beliefs, feelings, attitudes, behavioural intention and behaviour 156 Figure 3.7 Search 170 Page xxvii

29 Figure 3.8 The internal search process 173 Figure 3.9 Benefits and costs guide search effort 175 Figure 3.10 Alternative evaluation 196 Figure 3.11 The alternative evaluation process 197 Figure 3.12 Categories of decision alternatives 203 Figure 3.13 Purchase and its outcomes 214 Figure 4.1 From broadcast to dialogue 232 Figure 4.2 An Internet model for consumer decision-making 236 Figure 4.3 Methods of becoming aware of a seller's Website 239 Figure 4.4 Stages in product search using a shopping bot 248 Figure 4.5 The impact of incentives offered by Web sellers 250 Figure 6.1 Cross-tabulation example 320 Page xxviii

30 Figure 7.1 Internet shoppers vs. non-shoppers 334 Figure 7.2 Gender of respondents 424 Figure 7.3 Respondents' household language 431 Page xxix

A FRAMEWORK FOR THE IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT IN THE SOUTH AFRICAN AIR FORCE JACOBUS JOHANNES OSCHMAN

A FRAMEWORK FOR THE IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT IN THE SOUTH AFRICAN AIR FORCE by JACOBUS JOHANNES OSCHMAN submitted in accordance with the requirements for the degree of DOCTOR OF ADMINISTRATION